If St. Petersburg Mayor Ken Welch forces the City Council Members to vote on the proposed Rays/Hines deal on July 18, or any time before the Council Members have what they need to complete a proper and critically important evaluation, they must vote no. How can they do otherwise?
74% of voters polled say the proposed deal is unfair
72% of voters polled say the proposed deal should be renegotiated.
With over 30 years of experience leading Raymond James Affordable Housing, one of my main responsibilities was our investment committee. In this capacity, I assessed thousands of multi-million-dollar real estate deals on behalf of our investors. Our primary task was to determine whether the transactions were suitable for the investors and aligned with their best interests.
While our committee members all had years of experience analyzing deals, we did not solely depend on it, nor did we solely rely on the information presented by the real estate developers seeking our investment. We employed independent legal counsel, acquired up-to-date and impartial appraisals, environmental reports, and any other relevant information to assess the transaction thoroughly – ensuring an informed decision-making process. Furthermore, we refrained from casting our vote until all the necessary information was at our disposal.
The St. Petersburg City Council Members are in the same position.
Rays, Hines, and Mayor Welch have requested the City Council's approval for an investment in the Rays/Hines proposal. Similar to our investment committee, the City Council is responsible for assessing the investment on behalf of their constituents - the residents of St. Petersburg - in order to determine if the proposal aligns with the residents' best interests. In order to carry out this evaluation effectively, council members require sufficient time, information, and external expertise. However, they are currently lacking the necessary time and resources to conduct a comprehensive review.
City Council in Untenable Position
Most people don't know that City Council Members have yet to receive a finalized, complete set of documents for review. The anticipated final documents - expected in the coming week - will consist of hundreds of pages, be extremely intricate, and bind St. Petersburg to a 30-year agreement going forward. There is immense pressure on council members to go through these numerous pages within a brief two-week timeframe for a July 18 vote. How did this situation come about?
Timeline and Milestones
In March 2023, St. Petersburg Mayor Ken Welch started negotiating a deal with the Tampa Bay Rays and their development partner Hines, to build a new baseball stadium and transform about 40 acres of parking lots into offices and apartments - probably the most consequential development St. Petersburg will ever see. In October 2024, the Mayor provided a preliminary look at the proposed deal to the City Council Members - the Council Members that are responsible for evaluating the proposed deal, consider its place in what matters most to the people and future of St. Petersburg - and vote yes or no.
Over the following six months, Mayor Welch, in agreement with Council Chair Deborah Figg-Sanders (who has the authority to schedule Council meetings), cancelled monthly meetings with the Council. Consequently, the Council members remained uninformed about the ongoing negotiations. Due to the restriction on discussing business outside formal meetings, Council members were unable to exchange thoughts from the October meeting. This period of six months could have been utilized for the city and the Council to engage in collaborative efforts.
With just two recent meetings that offered the Council Members only partial information, and only one more meeting scheduled, the mayor and Figg-Sanders anticipate a vote on this highly complex and significantly impactful deal on July 18.
Forced Timeline / False Urgency
Why is Mayor Welch forcing the City Council into this situation?
The mayor's job is to see that City Council Members have the time, the information, and the outside expertise necessary to complete their analysis for what is probably the biggest transaction the city will ever make.
City Council Members have not received the information they need, the time they need, nor the outside expertise they need to help evaluate a very complex transaction. (We did not elect council members with an expectation that they were legal scholars or deal makers.)
What is the rush?
Where is the transparency?
Why is Mayor Welch forcing a decision without allowing the City Council the time and the information they need for a comprehensive review?
Why should there be a hard deadline, especially when the future of St. Petersburg is in play, and when 74% of voters recently polled felt the proposed deal is unfair to taxpayers.
Is it not better to take all the time necessary to get the best solution?
Is it that the Rays and Hines are pushing a rushed conclusion because they realize they have won so much in the negotiations they fear they will lose under further scrutiny - scrutiny which is the responsibility of the City Council Members?
The City Council Members must not act irresponsibly, and with haste.
If the Mayor and Figg-Sanders force a vote on July 18, or any time before the Council Members have what they need to properly and critically evaluate what is in the best interests of the people of St. Petersburg, they must vote no.
Critical Unanswered Questions and Concerns
Partnership Details: The exact nature of the Hines Historic Gas Plant District Partnership remains unclear. Do we have the full backing of Hines and Rays, or is it something else entirely?
Legal Document Concerns:
The city council members have yet to receive the final documents, which comprise hundreds of pages filled with significant provisions. The city has spent close to $1.5 million for outside attorneys to rush these documents. The attorneys are grappling with a tremendous amount of complexity and last-minute changes.
Independent legal experts have flagged the current documents as one-sided and in need of renegotiation. The development agreement includes provisions that prevent the city from terminating the partnership for cause and allow Hines to transfer its interests without city approval. Why would the city agree to these terms, and why hasn’t the city responded to Council concerns?
The St. Petersburg City Council needs to employ independent counsel to help them navigate the agreements.
Property Valuation Issues: The sale price of $105 million for the 40 developable acres - $2.5 million/acre - appears significantly undervalued. The city has a $29 million appraisal for just 2 acres nearby - $15 million/acre! Why is the city not getting a current appraisal for the 40 developable acres before negotiating the sales price? Should Council Members be asked to approve the sale any city property without a clear understanding of its value?
Parking and Traffic: Tropicana Field, current home of the Rays has 6,000 surface parking spaces. Once the parking garages are developed, where are all the cars going to park? Isn't there a need for an independent traffic, parking, and congestion study before the City Council members vote?
Environmental Standards: There are no assurances that the stadium meets critical environmental standards, including hurricane resilience, considering St. Petersburg's location. Why isn’t there an independent environmental report?
Broader Community Priorities: The city has not provided a rationale for prioritizing this deal over other critical needs such as affordable housing and $5 billion of sewer and stormwater repairs - with the increasing risk of hurricanes.
Public Opinion Ignored: The recent voter poll indicates 86% public support for an updated appraisal, rent payments by the Rays, and revenue sharing with the city. Why is Mayor Welch seemingly ignoring these preferences? The St. Petersburg City Council needs to consider the public’s opinion and employ outside expertise to help evaluate the economics of the deal.
Recommendations for a Fair Process
Completed Documentation: Final documents should be provided at least two weeks before any Council discussion.
Engage Outside Advisors: St. Petersburg City Council should hire legal and economic advisors to help the members evaluate the deal and explore better opportunities.
Updated Property Appraisal: Ensure that property valuations reflect current market conditions.
Consider Alternative Development Options: Evaluate the reasonableness for revenue sharing and fair rent payments from the Rays.
Conduct Environmental Analysis: Address environmental concerns, including hurricane resilience and the stadium’s role as a relief center.
The Path Forward: Responsible Decision-Making
Mayor Welch’s current approach to the Rays/Hines deal lacks the necessary transparency and thoroughness. He should halt this hurried process, delay the vote, and collaborate with the Council to ensure they have the time and necessary information to make a responsible and informed decision. The Council is not the opposition—they represent the citizens of St. Petersburg.
City Council’s Responsibility
The Council Members have a fiduciary duty to the citizens to prioritize the community’s best interests - to carefully considering the benefits and costs of the deal, along with alternative options, broader priorities, and public opinion. But to do this they need expert advice, information and time.
If the Mayor and Figg-Sanders force a vote on July 18, or any time before the Council Members have what they need to complete a proper and critically important evaluation, they must vote no. How can they do otherwise?
To Our Readers
To our readers:
The St. Petersburg City Council Members need time, information and expertise before they can make an informed decision to vote yes or no on the Rays/Hines proposal.
If you are as concerned as we are that Mayor Welch is pushing the City Council Members to vote on July 18, before they have what they need to make a proper decision, you can help.
You can easily contact St. Petersburg City Council to Slow Down the Process.
